Criminal Taxes Unit
HMRC have complete discretion to conduct a Criminal Investigation in any case. They usually do this where they feel they need to send a “strong deterrent message” or where they feel the case is so serious (“heinous” in their language) that only a criminal sanction is appropriate. Where a taxpayer is investigated using the Contractual Disclosure Facility but either: denies committing tax fraud; or fails to fully co-operate; or makes materially false disclosures; then HMRC will often feel they have no alternative but to prosecute. Tax prosecutions are handled by the HMRC Criminal Taxes Unit.
The Criminal Taxes Unit (CTU) is a branch of HMRC's Fraud Investigation Service. Most prosecution cases don't start off with the CTU. Most begin life as civil tax evasion investigations. It’s HMRC policy to deal with suspected Tax Fraud and Evasion by use of the Contractual Disclosure Facility Code of Practice 9 ("HMRC investigations where we suspect tax fraud") procedures, in most cases. These are handled by the civil investigation teams in the Fraud Investigation Service. They will gather evidence before passing the case to the Criminal Taxes Unit to commence formal proceedings under the Police And Criminal Evidence Act (PACE)
HMRC has published its prosecution policy. It will generally consider Criminal, rather than Civil, Investigations in the following situations, amongst others:
- Where an individual holds a position of trust or responsibility;
- Where materially false statements are made or materially false documents are provided in the course of a civil tax investigation;
- Where, pursuing a tax avoidance scheme, reliance is placed on a false or altered document or such reliance or material facts are misrepresented to enhance the credibility of a scheme;
- Where deliberate concealment, deception, conspiracy or corruption is suspected;
- In cases involving the use of false or forged documents;
- Where the perpetrator has committed previous offences / there is a repeated course of unlawful conduct or previous civil action
Criminal Investigations can involve the full use of Police and Criminal Evidence Act (PACE) powers e.g.: surveillance; interviews under caution; searches of homes, business premises and even individuals, accompanied by uniformed police and possibly involving seizure of cash, computers, business and personal financial records, and other assets; formal arrest; charging with offences such as Common Cheat; detention without bail; passport surrender; fingerprinting and mugshots; public court appearances; Confiscation Orders; and custodial prison sentences. They can be highly stressful and very costly: often leading to business failure; the loss of savings and assets; and relationship breakdowns.
How can Lynam Tax help me if I'm worried about prosecution
Lynam Tax has a long history of successfully helping clients avert prosecution for tax offences, and of persuading HMRC to drop Criminal Prosecutions, in favour of Civil Tax Investigations. Where HMRC do pursue a Criminal Investigation we have a great deal of experience of working closely with specialist defending solicitors, and in the preparation and checking of evidence bundles: which can frequently lead to large reductions in sentences, and in the amount HMRC seek to recover by way of Confiscation Orders.
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Call Paul Lynam now: on 0845 643 9997
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